Question

This is a 2-year timeline of Microsoft's stock prices:

Date	Open	High	Low	Close	Adj Close	Volume
1/1/16	null	null	null	null	null	null
2/1/16	54.880001	55.09	48.189999	50.880001	48.439545	813425300
3/1/16	50.970001	55.639999	50.580002	55.23	52.958412	640548300
4/1/16	55.049999	56.77	49.349998	49.869999	47.818874	697861300
5/1/16	50	53	49.459999	53	50.820141	530284000
6/1/16	52.439999	52.950001	48.040001	51.169998	49.408588	823351500
7/1/16	51.130001	57.290001	50.389999	56.68	54.728916	647351200
8/1/16	56.599998	58.700001	56.139999	57.459999	55.482067	466729800
9/1/16	57.009998	58.189999	55.610001	57.599998	55.96389	526196300
10/1/16	57.41	61.369999	56.32	59.919998	58.217987	614211700
11/1/16	59.970001	61.41	57.279999	60.259998	58.548336	612034100
12/1/16	60.110001	64.099998	58.799999	62.139999	60.782795	513256500
1/1/17	62.790001	65.910004	61.950001	64.650002	63.23798	493283800
2/1/17	64.360001	65.239998	62.75	63.98	62.582615	440701500
3/1/17	64.129997	66.190002	63.619999	65.860001	64.812111	489169700
4/1/17	65.809998	69.139999	64.849998	68.459999	67.370735	433065900
5/1/17	68.68	70.739998	67.139999	69.839996	68.728775	517218500
6/1/17	70.239998	72.889999	68.089996	68.93	68.222076	629584800
7/1/17	69.330002	74.419998	68.019997	72.699997	71.953354	469851200
8/1/17	73.099998	74.959999	71.279999	74.769997	74.002098	444041200
9/1/17	74.709999	75.970001	72.919998	74.489998	74.117767	375983900
10/1/17	74.709999	86.199997	73.709999	83.18	82.764351	449950000
11/1/17	83.68	85.059998	82.239998	84.169998	83.749397	421926000
12/1/17	83.599998	87.5	80.699997	85.540001	85.540001	466203300
1/1/18	86.129997	90.790001	85.5	90.139999	90.139999	258396500

Explain why the company’s stock price has changed using cash flow language for 4-5 major price changes. Hint: watch the news, use that info regarding the company to make assumptions about implied future cash flow expectations.  

Cash Flow:

Cash Flow

All numbers in thousands

Period Ending	9/30/2017	6/30/2017	3/31/2017	12/31/2016
Net Income	6,576,000	6,513,000	4,801,000	4,223,000
Operating Activities, Cash Flows Provided By or Used In
Depreciation	2,499,000	2,343,000	2,453,000	2,166,000
Adjustments To Net Income	397,000	7,193,000	570,000	-822,000
Changes In Accounts Receivables	7,949,000	-6,875,000	1,487,000	-2,724,000
Changes In Liabilities	-3,362,000	1,523,000	1,416,000	1,189,000
Changes In Inventories	-1,023,000	-199,000	-16,000	1,132,000
Changes In Other Operating Activities	-596,000	507,000	-51,000	1,129,000
Total Cash Flow From Operating Activities	12,440,000	11,005,000	10,660,000	6,293,000
Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures	-2,132,000	-2,283,000	-1,695,000	-1,988,000
Investments	-4,699,000	-4,625,000	-2,614,000	10,927,000
Other Cash flows from Investing Activities	-73,000	-461,000	-1,882,000	-23,690,000
Total Cash Flows From Investing Activities	-6,904,000	-7,369,000	-6,191,000	-14,751,000
Financing Activities, Cash Flows Provided By or Used In
Dividends Paid	-3,003,000	-3,009,000	-3,012,000	-3,024,000
Sale Purchase of Stock	-2,263,000	-1,544,000	-1,883,000	-3,468,000
Net Borrowings	-925,000	1,867,000	-966,000	9,196,000
Other Cash Flows from Financing Activities	-150,000	-15,000	-375,000	312,000
Total Cash Flows From Financing Activities	-6,341,000	-2,701,000	-6,236,000	3,016,000
Effect Of Exchange Rate Changes	26,000	15,000	12,000	-18,000
Change In Cash and Cash Equivalents	-779,000	950,000	-1,755,000	-5,460,000

Answer 1

There have majorly been 4 different price changes during which the company's cash flows are as given.

Thus as we can see all the major price changes as follows

Please also find below the changes in the company's cash flows corresponding to the dates when there have been changes in the stock prices

Thus as we can see the major changes have happened owing to changes in CFO majorly. This is because CFF and CFI are basically dependent on the vagaries of the market and macro conditions. However the CFO actually determines the operational robustness of the company.

CFI is negative as the company has done capital expenditures and investments in the business. Thus Net Cash Flow negative for these years would not mean much harm as this is something that the company has envisaged and invested for for the future. This will definitely yield results in the years to come.

We can see tha the date of change in the stock prices is in tandem with the date of the reports. This is basically meaning that the company would have met Wall Street analyst estimates for those specific parameters.